The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court of Australia against 28 parties, including telecommunications companies and their related companies, finance companies and individuals, alleging exclusive dealing (third line forcing) and misleading and deceptive conduct. The bundled services deals business model (see below) to provide telecommunications services and equipment is common in the telecommunications industry. The total dollar value of such deals is estimated to be in the tens of millions. The deals target small business.

The telecommunications and related companies named as respondents in the proceedings are members of the Clear Communications, Axis Telecoms and WorldTel groups and National Telecoms Group Pty Ltd. A complete list of the respondents and their alleged conduct is attached.

It is alleged the telecommunications companies used a “bundled services deals” business model. Under the deals the company would enter into a contract with a small business to provide it with telecommunications services and call credits to cover payments for what some customers thought was “free” equipment. Whereas, it is alleged, the equipment was supplied to customers under rental agreements by finance companies that were not related to the telecommunications companies.The ACCC alleges that the bundled services arrangement is exclusive dealing, in breachof section 47(6) of the Trade Practices Act 1974.It is also alleged that in inducing the small businesses to enter into bundled servicesdeals, the telecommunications companies made some or all of the following misrepresentations:

the equipment provided under the deal is free total charges for telecommunications services will not exceed either a statedtotal charges under the bundled services deal will not exceed a specified amount per monththe only contractual commitment being made by the customer is with the telecommunications company the price of calls will be lower than that of the customers existing providerfixed line services will be ported to the telecommunications company within a short period of time, and/orthe telecommunications company will supply mobile services using the customers existing mobile carrier.The ACCC alleges that statements of that type misled customers in breach of sections52, 53(e) and 53(g) of the Trade Practices Act 1974 and/or sections 12DA(1), 12DB(1)(e) and (12DB(1)(g) of the Australia Securities and Investments Commission Act 2001.